Swift buys refrigerated carrier for $225 million

Wednesday, August 07, 2013

Swift Transportation Co. has purchased Utah-based Central Refrigerated Transportation for $225 million.
With the acquisition of the No. 5 temperature-controlled truckload company in the United States, Swift will become the second largest refrigerated truck provider.
Central generated $50 million in earnings and $504 million in revenue during the fiscal year ending June 30.
Swift’s chief executive officer, Jerry Moyes, served as Central Refrigerated’s principal owner, and further expansion into the refrigerated trucking business had been on the minds of Swift officials for the past few years. In May 2011, officials started looking at a variety of refrigerated trucking companies to target likely acquisition candidates.
"It makes perfect sense for Swift and Central to combine their businesses at this time,” Richard Stocking, Swift’s president and chief operating officer, said in a statement. “Our customers are looking for comprehensive solutions to their transportation needs and this combination will enable us to better serve them."
Jason Seidl, managing director of Cowen and Co., wrote in a company update that he expects a mixed reaction to the deal. He noted some investors will likely see this as a positive move and a reaffirmation of Swift’s acquisition strategy; others might be wary of the previous ties between Swift and Central.
“SWFT has been eying acquisitions for some time, and this transaction is part of the company's efforts to execute on its acquisition strategy,” he wrote. “We are encouraged by the immediate accretion and the attractive valuation at which the deal was done. On the other hand, we believe that some investors may be skeptical of the transaction due to the fact that Central was owned by SWFT's CEO and controlling stockholder.” - Jon Ross